Wientzen: Legislative Challenges Threaten DM Industry

SAN FRANCISCO — The direct marketing industry faces serious legislative challenges at all levels, Direct Marketing Association president/CEO H. Robert Wientzen said in his keynote address at the 85th Annual DMA Conference & Exhibition at the Moscone Center here.

He cited teleservices, postal issues, remote collection of sales tax, privacy and spam as the top issues confronting direct marketers. Though these issues are not new and passage of any legislation is unlikely this year, Wientzen said he expected Congress to take them up again in early 2003.

He characterized the backlash against the teleservices industry as the biggest crisis. Though Americans spend $296.2 billion on outbound telemarketing offers, consumers clearly are fed up. Wientzen reminded attendees that 27 states have do-not-call registries with more on the way. Plus, with the Federal Trade Commission and Federal Communications Commission each looking to create national DNC lists, the issue has gained even more attention.

Wientzen estimated that a national do-not-call list would attract 30 million to 50 million consumers. He also said that with a national DNC registry on the table, a do-not-mail and do-not-e-mail list may follow.

Some good news for direct marketers came when FTC chairman Timothy Muris via satellite from Washington told the audience that he remains opposed to national privacy legislation and that the organization would continue to enforce existing laws.

Though postal rates will not rise until 2004, Wientzen said, bigger rate increases than in the past are likely at that time. He stressed that Standard Mail volume is down 4.5 percent and urged direct marketers to join the DMA's grassroots campaign for postal reform.

Without reform, Wientzen said, “The USPS is headed for fiscal meltdown.”

As for remote sales tax, he said Congress will reconsider the issue in 2003 and that the DM industry faces a tough battle. If remote sales tax collection were mandated, marketers would have to deal with 7,600 U.S. tax jurisdictions.

Privacy is another topic that lawmakers will revisit early next year, Wientzen said. With 1,500 bills at the state and local level, the issue is hotter than ever, he said.

“Respect for consumer privacy concerns is a business imperative,” he said. “Do the right thing.”

Despite firm belief in industry self-regulation, the DMA announced its support for a possible legislative remedy in the case of spam. Legitimate e-mail marketing response rates are dropping because of spam, Wientzen said, and marketing offers from reputable companies will suffer if the industry does not back a solution.

Looking ahead, Wientzen said the industry must focus on building market share.

“Thirty [percent] to 40 percent of Americans are not our customers,” he said.

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